Transparency in a Startup

David Cummings on Startups

One of the items entrepreneurs frequently debate is the level of transparency to provide within their startup. How much information does a team member need to know? When does not enough information cause problems? While there’s no perfect answer, I’ve found that it’s better to err on the side of providing more information than expected.

Here are a few areas worth considering as part of the transparency question in a startup:

  • How much cash is in the bank?
  • What’s the monthly burn rate?
  • What are the key metrics for the business and where do things stand?
  • What are the key metrics for each department and where do things stand?
  • What goals need to be hit to raise the next round of financing (if applicable)?
  • What are the top three challenges in the business (some issues, like those that are personnel related, can’t be discussed company-wide)?
  • What’s on the Simplified One Page Strategic Plan

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Notes from the EndoChoice S-1 IPO Filing

David Cummings on Startups

EndoChoice went public today on the New York Stock Exchange (NYSE:GI) raising $95 million. This is notable because it’s the first entrepreneur-lead company in Atlanta to go public in many years. Founded in 2008, EndoChoice is a medtech company focused on technologies and products for gastrointestinal conditions with their main innovation being an endoscopic imaging system.

Here are a few notes from the EndoChoice S-1 IPO filing:

  • Serves over 2,500 GI departments (pg. 1)
  • Fuse® system enables GI specialists to see more than twice the anatomy at any one time compared to standard, forward-viewing colonoscopes and has been clinically demonstrated to detect 69% more pre-cancerous polyps than standard colonoscopes. (pg. 1)
  • 15 million colonoscopies per year in the United States (pg. 1)
  • Revenues (pg. 2)
    2012 – $34.2 million
    2013 – $50.9 million
    2014 – $61.4 million
  • Net losses (pg. 2)
    2012 – $1.2 million
    2013 – $23.9…

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More At-Bats for B2C Startups in the Community

David Cummings on Startups

An entrepreneur recently asked me why we don’t have more B2C startups in town. Consumer startups, as opposed to business ones, have a lower success rate. Much like the movie business, even experts have a hard time telling what’s going to do well financially and what isn’t — it’s a “hits” business. With the continued success of Yik Yak here, there’s a renewed interest, and hope, in more B2C startups locally. What’s the solution? More at bats. More swings. More strikeouts. More hits.

Here are a few thoughts on more at-bats for B2C startups:

  • Incubators like Switchyards are working on developing institutional knowledge around what does, and doesn’t work, while catalyzing the community
  • More local success will result in more local hires that get exposed to consumer startups, and in turn they’ll start their own companies (success breeds success but there’s a chicken and egg problem to get it going)
  • More meetups, experience…

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Most Entrepreneurs Should Not Incorporate.

Hustle Creative

There are great reasons to incorporate: to define the terms of a partnership, and to protect your assets.  If you are going into business yourself, then you should assess the risks of the business you are entering, and whether or not your have assets worth protecting.  Most people just starting their business likely do not have assets to protect yet.  Incorporating your business does nothing to make it more “real” or “legitimate”, and there are absolutely no tax benefits until you are making $250k or more.  I ultimately decided to hold off on incorporating; this video helped make the decision:

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How Saying “No” Will Help You In Business

Saying “No” Helps You Focus Your Services

As a full-time CEO and a part time writer, I have a lot of business on my plate, especially when it comes to writing. When it comes to writing, I could accept any number of projects, but when push comes to shove, it only makes sense to pick projects that interest me, that pay well, and that will help me build my career. It’s true that any number of people, at any time, might be knocking on my door and asking me to write for them, but it only makes sense to say yes if it helps me grow my business, or develop further personally or professionally. As a full-time CEO, most of my time is sucked away with my full-time business, so when it comes to writing, I only say yes to projects that really fall in line with my writing goals.b0f12f0f-9cc2-4058-ae64-b27af9a1090c-original

The same goes for you and your business. You’ll be surprised at how many services people will ask you to provide when they are happy with one service you have already provided them, but if it doesn’t fall in line with the kind of business you do, it will often end up sucking your time, and not paying off in the long run. Stick to what you know, and what you’re good at, and as you say “no,” you will be able to continually focus and fine-tune your services.

Make More Money And Save Time

Another reason to develop the habit of saying “no” when it’s appropriate is that it helps you make more money and save time. For example, you know exactly how many projects you can balance, how much time each project will take, and a quick cost analysis will tell you which projects make sense when divided up into an hourly, and which projects do not. If a project is going to suck so much time that you end up getting paid less than minimum wage for the hours put in to the project, it’s worth it to say no and accept a project bid that makes more financial sense.

Say No When You Don’t Have A Contract

Another time saying “no” will help you in business is when you don’t have a contract, or when the company hiring you is being weird about payment agreements. If you don’t feel comfortable that you will be compensated appropriately, or don’t trust the company you are doing business with, don’t be afraid to tell them no, and to put your time and energy into working for someone who is willing to sign a contract, and/or pay upfront.

What are some other times YOU think you should say “no” to business?

From My recent Blog